Research reveals which car brands hold their value best
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When considering the purchase of a new car, the depreciation of our investment is always at the forefront of our mind.
Will our car lose much of its value in a matter of months? How much will it be worth in three years' time?
New research from vehicle checker carVertical aims to give some insight into how quickly car brands lose their value - or not.
After a new car drives out of the dealership, it immediately loses a fair percentage of its retail price.
While the vehicle’s value continues to degrade over time, some brands depreciate more than others.
To identify which car brands lose the most value, carVertical's automotive experts analyzed more than 72 million data units between 2019 and 2022 in Europe, US, and Australia.
Porsche (-64.4%), Jeep (-84.4%), and MINI (-85.5%) are the least depreciating three brands - with the highest amount of their value remaining after subtracting the car’s lowest market value from its initial price.
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For example, Porsche will lose only 64.4% of its value over the years, while Lexus will lose 89.9% of its value.
The 10 least depreciating car brands, according to the report, are:
Land Rover: -86.3%
"While Porsche manufactures sports cars, its models are practical enough for daily driving," said Matas Buzelis of carVertical.
"The 911 is probably one of the most iconic cars in automotive history with a huge fan base. There's no wonder its demand outstrips supply. Porsche cars are reliable, durable, and have a distinct look that attracts customers."
More traditional brands like Hyundai and Toyota also appear among vehicles with high residual value.
These vehicles are more affordable and typically offer lower maintenance costs, raising their desirability among used car buyers, the research said.
While some premium-class brands like Jaguar, Land Rover, and Lexus tend to depreciate less, this isn't always the case.
At the other end of the spectrum, the data shows the most depreciating car brands over the years are Chrysler, Audi, and Seat.
The top 10 most depreciating car brands, according to the research, are:
Alfa Romeo: -94.2%
For example, the maximum depreciation of a new Chrysler will eventually drop to -96.8% (in 25 years on average), making it the brand that loses most of its value on the market.
And around half of the brands on the wrong end of the car depreciation chart are premium class.
Even though consumers love Infiniti, BMW, and Volvo, their value decreases significantly over time.
To compare, Toyota cars reach their lowest value at the age of 19, whereas BMW gets there at 21.
Toyota vehicles lose about 88.7% of their value, whereas BMWs lose 93.8%.
"BMW and other luxury car brands typically have features and technological improvements that second-hand car buyers don’t value," Matas said.
"If you can afford a new BMW, Mercedes-Benz, or Land Rover, you probably want all the luxury and innovations you can get.
"A person looking for a used car prioritizes price and maintenance costs against all the unnecessary features. That’s why a used Toyota for many customers is more appealing than a BMW."
Owners of Audi (-96.2%), Seat (-95.8%), and Skoda (-95%) also shouldn't expect a good deal when selling their old vehicles either.
However, according to the carVertical researchers, the average age of the most depreciated vehicles is 20-23 years old.
But different car brands reach their lowest value at different stages.
Porsche and MINI cost the least when they turn 15 years old. After they hit this mark, their value starts to grow again and well-preserved models may be a valuable investment.
Isuzu, Suzuki, Kia, and Dacia are on the opposite side of the spectrum — they reach rock bottom at the age of 30.
Below is the age at which brands lose the largest percentage of their initial value:
If a model is considered rare, the car’s value may grow significantly over time.
In the 1990s, BMW only made 891 units of M5 E34 Touring. 20 of them had a special name – Elekta – and were built for the Italian market.
Powered by a 335 hp 3.8-liter engine, such estate models also received a special paint job and interior style.
Seeking a used Elekta today is like searching for a needle in a haystack. Car enthusiasts should be ready to spend no less than $100,000 to park one in their garage.
While a regular car will probably end up in a landfill in 20-30 years, a Porsche or Jaguar with a documented service book and impeccable history may even become more valuable with time.